Army veteran Scott Boyd stands in his home with his dog, Jessi, near Columbus, Ohio. A loan modification raised his VA home loan payment by nearly $1,200 every month. Because of his work in military intelligence, Boyd asked that NPR not include his face in any photographs.
Maddie McGarvey for NPR
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Maddie McGarvey for NPR
Thousands of military veterans with VA-backed mortgages have been hit with higher interest rates and monthly payments since last year, when the Trump administration shut down a low-interest program designed to help them.
Among veterans who had their loans modified after a financial hardship, more than 15,000 saw their monthly payments increase by at least $150, according to an NPR investigation that obtained previously unreported data from the Department of Veterans Affairs.
More than 700 veterans suffered payment increases of $1,000 or more.
Lenders offer loan modifications to enable homeowners to catch up on missed payments. It involves changing the loan terms, and for the vast majority of Americans, it either lowers their payment or keeps it the same, depending on what they can afford. But that’s not the case for VA loans, since the VA abruptly ended the program.
NPR found that 63% of veterans who received a loan modification were hit with a payment increase, compared with just 2% for modifications of loans guaranteed by the government-sponsored enterprises Fannie Mae and Freddie Mac, which cover most of the U.S. mortgage market.
“This is the height of insanity,” said California Democratic Rep. Mark Takano, the ranking member of the House Veterans’ Affairs Committee, after NPR shared its findings.
“These are veterans that are already financially distressed — they were already in trouble,” he said.
Veterans like Scott Boyd are literally paying the price.
When Boyd was a teenager, his dad died of cancer. He said he saw the military as a clear path to start helping his family.
“My mom signed paperwork when I was 16,” Boyd recalled. “I’m like, ‘I’m sending my checks home to take care of my mom.'”
He started out in the infantry and saw combat. Later, Boyd worked in Army intelligence in some dangerous places. When he got out in 2002, he had skills that set him up for a career in tech. In 2021, he bought a house near Columbus, Ohio, using a VA home loan. Like other buyers at the time, he got a nice low-interest rate. “I felt very blessed,” he said.
But a few years later, Boyd hit a crisis: He lost his job in a mass layoff, and he said his time in combat came back to haunt him in the form of PTSD. He checked himself into the Dayton VA hospital for treatment but fell behind on his mortgage.
Boyd and thousands of other veterans were pushed into much-higher-cost modified home loans. Hundreds are paying at least $1,000 more a month.
Maddie McGarvey for NPR
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Maddie McGarvey for NPR
Most Americans can get help in a situation like this. Mortgage companies don’t want to foreclose because both they and the homeowner experience losses. So they have levers they can pull to help people who’ve fallen behind on payments.
Boyd’s lender told him that he didn’t have to worry because the VA had a loan forbearance program that would allow him to pause his payments and provide him with an affordable way to catch up after.
“I later found out that wasn’t true,” he said.
It wasn’t true because the Trump administration then shut down a key part of the VA’s home loan program. It was called the Veterans Affairs Servicing Purchase (VASP) program. Without it, vets like Boyd were stranded with no option but a much-higher-cost modified home loan at today’s higher interest rates.
In Boyd’s case, he is now stuck paying $1,181 more — every month.
“This is outrageous,” said Boyd. “I remember just thinking to myself, ‘This is just so broken.'”
Some in Congress agree.
“The VA home loan program should not be making things worse and more stressful for that veteran, a combat veteran, who’s been through hell,” said Takano, about Boyd’s case in particular.
Rep. Mark Takano, D-Calif., speaks on Capitol Hill in 2025.
Rod Lamkey/AP
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Rod Lamkey/AP
Illinois Republican Rep. Mike Bost, chairman of the House Veterans’ Affairs Committee, did not respond to NPR’s repeated requests for comment. NPR also reached out to Wisconsin Republican Rep. Derrick Van Orden, a committee member who led the call to wind down the VASP program. He also did not respond to requests for comment.
The VA said in a statement that it helps thousands of veterans “retain homeownership and/or avoid foreclosure through programs like payment forbearance, loan modifications and individualized repayment plans.”
The VA was warned this would happen
Before it was shut down, the VASP program was helping tens of thousands of veterans who had fallen behind on their home loan payments by rolling those missed payments into a new mortgage with a low 2.5% interest rate. That made the program a lifeline for vets in today’s higher-interest-rate environment.
And Boyd said his mortgage company had been telling him that he too could use VASP when he was able to resume paying his mortgage.
“ I would constantly ask them, ‘OK, this is getting further and further behind,’ and they were like, ‘You have this last lever to pull.'”
This was in the spring of 2025, just months into the second Trump administration. Key Republicans on the House Veterans’ Affairs Committee vocally opposed VASP, which the Biden administration created after its own VA home loan disaster. Republicans warned that VASP was putting taxpayers on the hook for thousands of loans to vets who had trouble paying.
“If the Biden version of VASP was allowed to continue, I fear that the home loan will not exist in the future for my fellow veterans,” said Van Orden during a House Veterans’ Affairs Committee hearing on March 11, 2025.
Rep. Derrick Van Orden, R-Wis., speaks in Eau Claire, Wis., on Oct. 20. He is currently in a tight race for reelection.
Ellen Schmidt/AP
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Ellen Schmidt/AP
But at the same hearing, as well as in letters to Congress and press releases, the mortgage industry and housing groups explicitly warned the Trump administration not to kill the program without first creating another viable option for vets. They said if the VA shut down the program before standing up a replacement, vets would be left with far worse options than other American homeowners. With interest rates up around 7%, they warned that the only option left would be a modified loan at the current higher rates, which would result in foreclosures for those who couldn’t afford the higher payments. And that’s exactly what has been happening.
“ I was doing the math in my head as they were telling me, you know?” Boyd said about the loan modification he was presented with. “If I’m going from 2.75 to 6.75 … it seemed ridiculous,” he said. Not only would that jump in his interest rate boost his payment by nearly $1,200 every month, but his loan term was extended to 40 years. So he went from about half of his monthly payment going toward principal to now more than 90% of his payment going to cover just the interest.
“This was a foreseeable outcome of abruptly ending a program without a replacement in place,” said Matthew Douglas, of the Housing Policy Council. He represents the largest mortgage companies in the U.S. and was among those warning the VA not to kill VASP. Asked about NPR’s findings, he said, “It’s a mathematical certainty that borrowers are going to have those kind of shocking payment increases.”
Despite the warnings, the Trump administration ended the VASP program on May 1, 2025 — apparently in coordination with House Republicans, who announced the move before the Department of Veterans Affairs did, even though VASP was ended administratively, with no vote from Congress.
“We — along with many of our colleagues — had serious concerns about the impact VASP would have on not only the future of VA’s home loan program, but the mortgage lending business as a whole. Today, the Trump administration rightfully put an end to VA’s VASP program,” Bost and Van Orden said in a joint press release at the time.
In his statement to NPR, VA press secretary Quinn Slaven wrote: “many leading voices in Congress supported the termination of VASP, which put the entire VA home loan program at risk.”
The VA’s new program slowly rolls out
Boyd lives with his partner and her four children, whom they are raising together.
Maddie McGarvey for NPR
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Maddie McGarvey for NPR
At the same time Van Orden was calling for VASP to be scuttled, he had written a bill to replace it with a new VA Partial Claim Program (PCP). Congress quickly passed that bill with broad bipartisan support in the wake of the VA scuttling VASP. It directed the VA to create an option for vets behind on payments, enabling them to move their missed payments to the back of their loan term. That way, vets could keep their original mortgage and not be forced into a higher-cost loan.
But after ending VASP, it took the VA more than 13 months to design and announce the details of the new program, which it did in June of this year. And the industry was then given another 180 days to implement it. Most mortgage companies still do not offer it.
In that gap, thousands of veterans got modified loans with higher interest rates and payments. The VA’s new PCP program won’t do anything to help those vets — they’ll remain stuck in those modified loans.
Congress could help
Boyd holds a challenge coin from the Department of Defense that was given to him during his military service.
Maddie McGarvey for NPR
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Maddie McGarvey for NPR
NPR asked the VA about the vets who fell into the gap between the two programs. Slaven, the VA spokesman, said in his statement that the VA home loan program “is based on the premise that while Veterans may need some assistance, they must generally be able to make their mortgage payments.”
Industry groups say raising a struggling homeowner’s payment makes it more likely for them to redefault and face foreclosure. Foreclosures on VA loans rose to a 10-year high after VASP was killed, according to industry data. Experts warned in a congressional roundtable in September that time is running out for the government to help these vets or a wave of foreclosures is still to come.
Rep. Takano told NPR that the VA, if it chose to, could put these vets back into lower-cost mortgages or that Congress could pass a law to do it.
“We could do something for those veterans who saw a jump in their interest rates,” Takano said.
Hanging on to home
Boyd says he feels defeated after receiving worse loan options from the VA.
Maddie McGarvey for NPR
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Maddie McGarvey for NPR
Outside Columbus, Ohio, Scott Boyd is still managing to make those higher mortgage payments.
When he bought the home, he said, it felt like a guarantee of shelter and stability for him, his partner and the four kids they are raising together.
“ I made a commitment, saying no matter what, I want to build a home that is big enough. … I wanted to get them in better schools and things like that,” he said.
He was even able to help when his father-in-law became ill recently; they moved him into the finished basement, where he got home hospice care.
So when he was presented with the terms of that loan modification, he had not only kids in the house but his dying father-in-law too. He’d just gotten back on his feet financially and was being told his options were the loan modification or foreclosure.
“My job was still new, and that still felt shaky. … My PTSD was shaky. … It seemed like the right thing to do was just to take the modification,” he said.
Two weeks after Boyd signed the loan modification, the VA launched the new Partial Claim Program that would have allowed him to keep his original loan terms with the same monthly payment and low 2.75% interest rate. It took two more months before the first mortgage company offered vets access to the PCP, and most of the industry is still working to stand up the program before the deadline that the VA gave it of Nov. 28.
Boyd said that he doesn’t often talk about his service and that he doesn’t feel entitled to be treated better than any other American. But he did not expect the VA to give him worse options than those of people who never served.
“ I really felt hurt more than anything. I wasn’t angry. I was just like, I felt so defeated,” Boyd said.
“Everything that I’ve done for this country and the things that I’ve been through, the things that I’ve seen, the things I’ve had to deal with … it’s come down to, ‘Yeah, I’m sorry — it’s not in our systems yet. … There’s nothing we can do about it.'”
Source: www.npr.org
